Tax Credits

Stephen Timms Excerpts

Tuesday 15th September 2015 Commons Chamber

[Damian Hinds]

Allow me to make a wee bit of progress.

Reforming tax credits and other benefits forms the first of five pillars of the Government’s approach to supporting working Britain. The second is the increase in the personal tax allowance; the third is the national living wage, the fourth is the major extensions to child care provision; and fifth is the overall sound economic management that is delivering growth in the number and quality of jobs, earnings and living standards.

[Stephen Timms (East Ham) (Lab)]

A couple with two children, in which one works as a senior schools admission official earning £26,000 a year, will be more than £2,500 worse off next year because of the measure the Minister is proposing. Does he recognise that it will wreck the solvency of that working family? What does he think they should do?

[Damian Hinds]

It is important we see these changes in the overall context. I outlined some of the additional elements that are relevant. I certainly accept that they do not all come into play at exactly the same time, but in the course of time they do and by 2017-18 eight out of 10 households will be better off.

Tax Credits (Working Families)

Stephen Timms Excerpts

Tuesday 7th July 2015 Commons Chamber

[Stephen Timms (East Ham) (Lab)]

We have had a good debate. I begin by congratulating my hon. Friends the Members for Bradford West (Naz Shah) and for Blackburn (Kate Hollern), and the hon. Member for North Ayrshire and Arran (Patricia Gibson), on their excellent maiden speeches and their contrasting reflections on their predecessors. The House looks forward to hearing much more from them in the years ahead.

The Minister said at the beginning that he wants the Government to be a Government for working people. That is a laudable ambition, but they are failing. My hon. Friend the Member for Sheffield, Brightside and Hillsborough (Harry Harpham) is right that working people feel uncertainty and insecurity. Working families are deeply worried about what the Government have in store. They have suffered a long squeeze on their incomes, and they are worried about a fragile recovery and what the future holds for their grandchildren and children. Their insecurity has been heightened by the prospect of deep cuts to the tax credits that they rely on, and which it appears the Chancellor will announce in the Budget tomorrow. Working families will pay the price for the decision of the Prime Minister and his Chancellor to promise big reductions in social security spending before the election without having worked out a plan to deliver them. The announcements tomorrow will not be about making work pay—in this instance, that is baloney—but about making working families pay.

The Opposition welcome new concern from Conservative Members about low pay—we have heard a good deal in the debate about the living wage and the need for more secure, high-skilled and high-productivity jobs to support that. We all want a higher-productivity, higher-wage economy, but that requires a change of direction in the management of the economy. For example, it would mean delivering infrastructure, not just second or third announcements of future projects, or announcing and then cancelling them, as has happened in the past couple of weeks. It would mean high-quality training and apprenticeships for young people, not just rehashing old courses.

What the Chancellor must not do—it appears that this is exactly what he plans to do—is make working families much worse off by cutting their tax credits long before any increase in their pay. In millions of working families, people work hard but rely on tax credits for the family budget, as was acknowledged by Conservative as well as Opposition Members. It is high time to tackle low pay, but the Government should not attack the low paid, which is exactly what cutting tax credits will do. It will be an attack on working families on low and median incomes.

It would be fantasy to claim—I am glad nobody did so in the debate—that cutting tax credits will in itself lead to higher pay. Research has shown that the introduction of tax credits did not push pay down, and the drastic cuts now envisaged will not push pay up. Raising the personal tax allowance is not the answer—60% of tax credit claimants earn too little to pay income tax. Only about 1% of the cost of the planned personal allowance rises will actually be spent on lifting lower earners out of tax.

Tax credits recognise the needs of children in a household in a way that wages never can. The hon. Member for South Suffolk (James Cartlidge) suggested that tax credits provided a ceiling on earnings. That is completely untrue. That is not how the system works at all. In fact, tax credits have been by far the most effective move we have ever made in Britain to make work pay. They were introduced by the Labour Government alongside the boost to pay of the national minimum wage, improved and expanded childcare with Sure Start, and groundbreaking welfare-to-work support with the new deal.

The combination was a huge success, boosting employment by making work pay, supporting the incomes of large numbers of working families, and reducing child poverty in large part by making it worth the while of many more lone parents to be in work. The lone parent employment rate was less than 45% in 1997. Today, it is nearly 65%. Researchers have shown that that transformation was largely thanks to tax credits. The benefits have gone much wider. My hon. Friend the Member for Birmingham, Ladywood (Shabana Mahmood) opened the debate. In an excellent speech, she drew attention to what the Financial Times said recently, which is that the system of financial support we have in Britain for low-income working families is a key reason for our high rate of employment.

The flagship reform of this Government, universal credit, aims to build on the success of tax credits. We have always supported the principle of universal credit and we still want it to succeed. It is a good idea. The Government, however, have utterly failed to deliver it. Five years after it was announced, less than 1% of claimants are receiving it and 99% are still on the old benefits. In 2011, we were told it would take six years to deliver universal credit. Today, we are told it will take another six years. Now, before it has even properly begun, the Chancellor wants to make drastic cuts in support for working families that would hole universal credit below the waterline.

Will the Minister tell us whether he understands the crucial difference between reforming welfare and labour markets to get people into work and make work pay, and taking an axe to social security and to employment support? These cuts will store up far greater costs if they send into reverse the progress of decades in raising employment rates and reducing child poverty. We will welcome any credible plans to tackle low pay. We have championed the living wage. As my hon. Friend the Member for Edmonton (Kate Osamor) pointed out, the coalition Government presided over a 45% rise in the number of people paid less than the living wage,

[Mr Stewart Jackson (Peterborough) (Con)]

There is consensus on the living wage. I personally hope that there will be fiscal incentives in the Budget, and in future, to persuade employers to look at that. Does the right hon. Gentleman agree that unless the issue of working tax credits is reviewed, we will be continuing the practice of de facto subsidising large employers to underpay their staff?

[Stephen Timms]

If he had been present during the debate, the hon. Gentleman would have heard a lot of agreement that raising levels of pay is a good thing. That is the right way to reduce the cost of tax credits; not taking an axe to them now in the hope that pay will go up at some point in the future. Calculation of the living wage assumes that families receive tax credits. Those who calculate the living wage say that if families did not receive tax credits, the living wage would have to go up by another 25%.

Working people need a long-term plan to back businesses that commit to paying the living wage—I agree with the hon. Member for Peterborough (Mr Jackson) on the importance of that—and share with them the Exchequer savings, as we have proposed with our “make work pay” contracts. We need to give the Low Pay Commission the remit and the powers to tackle low pay across the country, as proposed in the report by Alan Buckle, the former deputy chair of KPMG. We need economic and industrial policies to support more high-skill, high-productivity jobs created by innovative competitive businesses of the future. Belated conversion to the cause of tackling low pay must not be an excuse for Ministers cutting away the vital support on which so many working families rely. As my right hon. and learned Friend the Member for Camberwell and Peckham (Ms Harman) pointed out to the Prime Minister two weeks ago, not a single family will be helped into work and not a single worker will see their earnings rise simply as a result of cutting tax credits. Ministers should be tackling low pay, but they must not attack the low paid.

The Government promised to eradicate the deficit in one Parliament and failed completely to do so, but working families must not be made to pay the price for that failure. Can the Minister assure us that any action taken to tackle low pay or in other ways to support the finances of working families will make up for the losses arising from tax credit cuts? I fear he cannot. He will not be forgiven for a shabby raid on the incomes and security of working families simply to get the Prime Minister and the Chancellor out of a hole. I hope that Members on both sides of the House will join us in supporting this important motion tonight.

The Economy

Stephen Timms Excerpts

Thursday 4th June 2015 Commons Chamber

[Stephen Timms (East Ham) (Lab)]

Thank you and congratulations, Madam Deputy Speaker. As you have said, we have had a good debate, which has demonstrated the seriousness and commitment with which we are ready to take up our duties as Opposition Members.

It has been widely acknowledged in this debate that my right hon. Friend the Member for Doncaster North (Edward Miliband), the former leader of our party, made a fine and powerful contribution. It was especially welcome for being so soon after our bruising election defeat. He addressed the topic of one nation, which was the theme of his leadership as well, drawing attention to the problem of rising inequality across western democracies. He spoke of the rungs of the ladder getting further apart and reminded the Prime Minister of his 2006 commitment to address relative poverty. I think the whole House will look forward to my right hon. Friend developing those ideas in the months ahead.

We have had valuable contributions from both sides of the House. I particularly congratulate everyone who has made their maiden speech today, including the hon. Member for Bexhill and Battle (Huw Merriman), the hon. and learned Member for South East Cambridgeshire (Lucy Frazer), the hon. Members for Glasgow South West (Chris Stephens), for Horsham (Jeremy Quin) and for Cannock Chase (Amanda Milling), my hon. Friends the Members for Greenwich and Woolwich (Matthew Pennycook) and for Cardiff Central (Jo Stevens), the hon. Members for Mid Worcestershire (Nigel Huddleston), for Kirkcaldy and Cowdenbeath (Roger Mullin) and for Thirsk and Malton (Kevin Hollinrake), my hon. Friend the Member for Sheffield, Heeley (Louise Haigh) and the hon. Members for North Dorset (Simon Hoare) and for Charnwood (Edward Argar). I congratulate each of them and wish them well for their membership of this House. The whole House will look forward to hearing more from each of them in the years ahead.

At the heart of this debate is the security of working families. Many families feel deeply insecure at the moment, in ways spelled out in a fine maiden speech by my hon. Friend the Member for Greenwich and Woolwich. How is the programme that has been announced going to affect them? We have yet to hear clear answers from the Government on how they plan to strengthen the foundations of our economy so that we can deal with the deficit, control social security costs and secure better living standards and a better future for the working people of Britain.

My hon. Friend the Member for Nottingham East (Chris Leslie) began by highlighting the fragility of our economic recovery. Productivity continues to stagnate, leaving output per worker far behind that of comparable advanced economies—a point that was highlighted by the hon. Member for Dundee East (Stewart Hosie).

The right hon. and learned Member for Rushcliffe (Mr Clarke) was right to point out that employers are struggling to find people with the right skills for their jobs. Many employees have roles that do not make full use of their talents and potential, and we have heard a great deal in the debate about the grave challenges relating to infrastructure and the need for more progress. Those underlying weaknesses will make it harder to get the public finances in order and to get social security spending under control.

Fragility in the economy translates into insecurity for working families, who have seen their living standards go backwards over recent years and still worry about whether they will be able to keep on top of their bills. Working families are struggling to balance the demands of work with the rising cost of childcare. They wonder whether the NHS will still be there for them when they need it in future and want their children to have a decent career and a realistic prospect of getting on the housing ladder. Too many at the moment are stuck in low-paid, insecure work and a growing number are depending on housing benefit to make ends meet. Those families all want to know what difference the measures in this Queen’s Speech will make to them.

There are welcome commitments in some areas, but questions remain about how some of them will be paid for. It is, however, what has been left out that gives the greatest cause for concern—actions not taken, details not provided—and makes many families less secure and fear for the future.

We all support any cut in taxes for low-paid workers, but we also need a serious plan to tackle low pay and boost wages for the majority by raising investment, as my hon. Friend the Member for Cardiff Central pointed out in her excellent speech. The hon. Member for Thirsk and Malton also rightly called for the adoption of a living wage in the UK. We need to raise the levels of skills and productivity across the economy, securing sustainable tax revenues and reducing the reliance on in-work benefits.

It was disappointing to have sprung on the House this afternoon, without any proper detail or explanation, a series of spending cuts in the Chancellor’s speech. There is a press release that outlines what they are, but there is no proper information. We should have had a statement so that the House could scrutinise the cuts. They include a significant cut to the skills budget.

We will welcome any help for working parents with childcare, but families can be forgiven for believing it when they see it, after five years in which it has become harder, not easier, to afford the childcare they need. There is a worry that the proposals in the Queen’s Speech are likely to result in fewer affordable homes and bigger housing benefit bills for taxpayers.

Britain succeeds only when working people succeed. Hard work should be rewarded, prosperity should be shared and we should protect the most vulnerable. Those elements, which are vital for our society, need to be underpinned by a strong social security net. The Opposition support the work that local authorities are doing under the Government’s troubled families programme, but we are aware that a majority of the families involved still have nobody in work and that the Work programme is not doing enough to help them. We will be glad to see additional money for apprenticeships.

We have made clear our support for the principle of a benefit cap to ensure that people are better off in work and for reforms to ensure that young people are earning or learning, and do not become caught in a benefits system that at the moment does too little to improve their skills and prospects. We will scrutinise—[Interruption.]

[Madam Deputy Speaker (Mrs Eleanor Laing)]

Order. I hesitate to interrupt the right hon. Gentleman. There is no heckling or bad behaviour going on, but there are an awful lot of private conversations. He has a difficult job to do and he should be given peace in which to do it.

[Stephen Timms]

We will scrutinise those proposals with great care. The well-meaning rhetoric on apprenticeships needs to be matched by action on the quality, as well as the quantity, of the apprenticeships that are being created. When the rules are changed on benefits for 18 to 21-year-olds, we will look carefully at the safeguards for the vulnerable young people who will be included. We need to ensure that reducing the benefit cap does not end up costing more than it saves.

Those measures amount to only a fraction of the £12 billion reduction in social security spending that the Government promised. We want to see savings where they can sensibly be made. We have argued consistently for keeping the system affordable. We have said that that requires a readiness to take tough decisions on low-priority spending, alongside action to tackle the underlying drivers of rising benefit bills, such as low pay and high housing costs. The unwillingness or inability of Ministers to explain to this House or the public how they intend to make the reductions that they have set out is adding to the insecurity that is felt by many working families today.

There will be widespread relief that the Prime Minister has, reportedly, overruled the Secretary of State on child benefit. However, working families need to know whether the tax credits and other in-work benefits that they depend on will be taken away. The Prime Minister yesterday declined my invitation to reaffirm his election campaign commitment that benefits for disabled people are safe. The Institute for Fiscal Studies says that it will be virtually impossible to achieve a £12 billion saving without hitting low-income working families hard.

When he gets to his feet, the Secretary of State needs to assure those who are clearly not well enough to work that support for disabled people and their carers will be protected. Government failures in that area—the failure of the rushed and ill-prepared incapacity benefit reassessment exercise and the failures of the Work programme for people in receipt of employment and support allowance—mean that the Government are spending nearly £5 billion more this year on employment and support allowance than they forecast five years ago. That is a serious failure.

We heard a Queen’s Speech five years ago that promised

“to simplify the benefits system in order to improve work incentives”.

That was a worthy aim, but there has been very little progress since then. My hon. Friend the Member for Bishop Auckland (Helen Goodman) touched on the problems with the IT for universal credit. In 2011, the Secretary of State told us that universal credit would be complete in six years; now he is telling us that it will be complete in another six years. In four years, completion has slipped by four years.

The Opposition will continue to stand up and speak for the working people of this country, who have endured years of falling living standards and economic uncertainty. They now need assurances and action from the Government to promote their security and to secure their finances and the public services that they rely on, and on which all our futures will depend.

Equitable Life

Stephen Timms Excerpts

Thursday 26th February 2015 Commons Chamber

[Stephen Timms (East Ham) (Lab)]

I wish to acknowledge, again, as has been done throughout this good debate, the extent of the hardship and anxiety that all too many people have endured as a result of the failure of Equitable Life. I, too, pay tribute to the hon. Members for Harrow East (Bob Blackman) and for Eastbourne (Stephen Lloyd) and my hon. Friend the Member for Leeds North East (Fabian Hamilton) who have led the all-party group, spoken in the debate and championed the cause of the victims of the Equitable Life collapse over the years, and to others like them. Like the hon. Member for Leeds North West (Greg Mulholland), I also want to pay tribute to EMAG for its tireless campaigning on behalf of so many people who have lost so much. Its campaign has won real sympathy and support in Parliament and among the wider public.

My hon. Friend the Member for Coventry North West (Mr Robinson) rightly pointed out that the hon. Member for Bromley and Chislehurst (Robert Neill) seemed to be a little unsure of the history of this case. The problems at Equitable Life occurred between 1990 and 2001, so almost all occurred under the regulatory arrangements in place before the creation of the Financial Services Authority. The previous Government, of whom I was a member, issued an apology in January 2009 to policyholders, on behalf of the public bodies and the successive Governments responsible for the regulation of Equitable Life between 1990 and 2001 and for the maladministration that took place.

The consistent argument of EMAG has always been that the losses incurred by Equitable Life members are due to maladministration, as opposed to the bad investments and rash actions undertaken by Equitable Life. As we have heard in the debate, EMAG felt vindicated by the ombudsman’s reports. The previous Government did not agree with that view—with the view of the ombudsman. Members of the current Government stated clearly during the election campaign —we have heard about the pledges that were widely signed by Government Members—that they did agree. In government, however, they have not delivered.

The previous Government recognised that many policy- holders were disproportionately affected by the events at Equitable Life, and on that basis announced a commitment to a payments scheme to help. The ombudsman proposed a scheme entailing a case-by-case review, looking at 30 million investment decisions by 1.5 million people over 20 years. The ombudsman thought that would take two and a half years, but others thought it would be more. The previous Government asked Sir John Chadwick to advise on a simpler scheme. His report in July 2010, after the general election, referred to

“the obvious impracticability—if not impossibility—of determining these questions on an individual basis”.

The new Government, elected in 2010, explicitly accepted the ombudsman’s recommendation. Indeed, today’s motion, which I shall address in a moment, congratulates the Government on accepting the ombudsman’s recommendation in full. However, that announcement having been made by the new Government, the ombudsman then wrote to every Member of the House in July 2010, saying:

“In the light of the new Government’s commitment to implement”

my

“recommendation in full, the approach embodied in the Chadwick report has thus been overtaken by events and cannot provide a basis for the implementation of the recommendation.”

She said that her proposal and Chadwick were irreconcilable, but Chadwick, as we have heard in this debate—the hon. Member for Leeds North West mentioned this—was in fact what was done. During the election campaign in 2010, the then Opposition spokesman went around the country promising that, if elected, the Conservatives would deliver on the ombudsman’s recommendation. During the campaign, EMAG asked candidates to sign a pledge. The hon. Member for Harrow East was telling us that Conservative candidates were encouraged to sign this pledge. It said:

“I pledge to the voters of this constituency that if I am elected to Parliament at the next general election, I will support and vote for proper compensation for victims of the Equitable Life scandal and I will support and vote to set up a swift, simple, transparent and fair payment scheme—independent of government—as recommended by the Parliamentary Ombudsman.”

More than 90% of Conservative Members signed that pledge: the Prime Minister did, the Chancellor of the Exchequer did. Every Liberal Democrat MP signed it, including the Deputy Prime Minister, and Equitable Life members and EMAG expected that once the coalition took office it would be delivered, but it was not. Not surprisingly, EMAG felt and still feels utterly let down by so many who signed that pledge in 2010 and did not deliver.

My hon. Friend the Member for Leeds North East referred to his amendment in the House in November 2010. I was just looking through the list of the 76 Members who voted for it, which includes the hon. Members for Harrow East and for Eastbourne, and of course my hon. Friend the Member for Leeds North East, but it was mostly Labour Members who voted for it. Hardly any of the 287 Conservative Members who signed that pledge voted for my hon. Friend’s amendment.

The Government formally accepted the ombudsman’s recommendation, but described Sir John Chadwick’s recommendation as one of the building blocks for a solution. That infuriated the ombudsman who argued that as the Government had accepted her recommendation, Sir John’s report was no longer relevant. It is worth looking again at what the ombudsman recommended. She wrote:

“My second—and central—recommendation is that the Government should establish and fund a compensation scheme, with a view to assessing the individual cases of those who have been affected by the events covered in this report and providing appropriate compensation. The aim of such a scheme should be to put those people who have suffered a relative loss back into the position that they would have been in had maladministration not occurred.”

No one would claim to the House that that is what has been done. The hon. Member for Southend West (Sir David Amess) made the point—the ombudsman’s recommendation has not been delivered—so I am a little puzzled, if I can cavil, as to why the motion invites us to welcome the Government’s acceptance of the ombudsman’s findings in full, given that they certainly have not been implemented.

Legislation was enacted in 2011 for a scheme. It is not an easy thing to fashion a scheme that is both fair to members and protects the public purse. The Government came up with a scheme that was reasonable, although it fell far short of what was hoped for. I am sure that other Members who have spoken have seen the film on the EMAG website, “Time for the Treasury to Settle its Debts”, which features quotes from both the Conservative and Liberal Democrat manifestos—commitments referred to by my hon. Friend the Member for Airdrie and Shotts (Pamela Nash) and by the right hon. Member for Arundel and South Downs (Nick Herbert) earlier in the debate. The Government therefore formally accepted the ombudsman’s recommendations, but instead implemented Sir John Chadwick’s recommendation.

We all hoped that the new scheme would administer payments effectively and efficiently. The Public Accounts Committee has been critical of the administration of the scheme, referring to a series of administrative failures, including delays in making payments to policy holders and poor customer service. Then in the March 2013 Budget the Chancellor announced some welcome limited compensation for those who bought their with-profits annuity before 1992.

Many people have suffered, in some cases a great deal, as a result of the failure of Equitable Life. The hardship suffered is not in doubt. We support the steps that Ministers have taken to provide some compensation, but it falls very far short of what Equitable Life members thought they were being promised by Conservative and Liberal Democrat Members during the election campaign.

The Minister who will reply to the debate today signed that pledge. She made a commitment to her constituents to support and vote for the full compensation that the ombudsman called for. It is for her to explain to the House and to all those who have lost so much why that pledge has not been delivered.

Oral Answers to Questions

Stephen Timms Excerpts

Tuesday 27th January 2015 Commons Chamber

[Danny Alexander]

I wholeheartedly agree with my hon. Friend. Not only has unemployment halved in his constituency, but employment has risen by 1,300 since 2010. That is testimony to the work of Liberal Democrats and the Government in creating stability and to his role of supporting and championing local businesses in the north-west of England.

[Stephen Timms (East Ham) (Lab)]

A striking feature of the recent trends in unemployment is the increase in youth unemployment, which has risen for three months in a row. In the figures that were published last week, it rose by 30,000, which is the biggest jump for almost two years. Why is it that while overall unemployment is coming down, youth unemployment is going up? Why are young people losing out?

[Danny Alexander]

I am sorry to have to correct the right hon. Gentleman, but youth unemployment has come down by 171,000 over the past year and is 175,000 lower than when the Government came to power. In his constituency, it is down 53% since 2010—a fact that I am sure he will join me in welcoming. I would agree with him that we need to continue for a number of years with the successful policies that are reducing unemployment in this country, to ensure that every young person has the opportunity to make the best of their life.

Oral Answers to Questions

Stephen Timms Excerpts

Tuesday 9th December 2014 Commons Chamber

[Mr Gauke]

We are confident that the measure will be effective in targeting multinationals that use aggressive tax planning and contrived structures to avoid UK tax. The diverted profits tax will be charged at 25% and will raise more than £1 billion over the scorecard period.

[Stephen Timms (East Ham) (Lab)]

The current corporation tax rate is the lowest in the G7 and there are good reasons why that is the case. However, on small business Saturday last weekend, many of us were reminded of the heavy burden of business rates. Would it not be better, instead of reducing the corporation tax rate further, to use the same money to reduce business rates?

Autumn Statement

Stephen Timms Excerpts

Wednesday 3rd December 2014 Commons Chamber

[Mr Osborne]

That is quite an offer. I met Tom Pursglove and my hon. Friend to discuss the infrastructure improvements that they wanted in the east midlands. We have been able to deliver what they have so successfully campaigned on and attracted so much local support for. That is a good combination of two strong local campaigners working for their local area to deliver improvements that, frankly, were never delivered under a Labour Government and that Labour MPs have never asked me for.

[Stephen Timms (East Ham) (Lab)]

The Chancellor has recognised that he will not deliver on his commitment to eradicate the deficit in this Parliament. Will he also recognise that a large part of the reason for the failure is that, as the OBR has acknowledged, tax receipts have been hard hit by the fall in real wages since the general election?

[Mr Osborne]

I acknowledged in my statement that tax receipts are £24 billion below what we forecast for 2017-18, but I pointed out that people have focused only on the tax side, not the spending side of the equation: lower unemployment and lower inflation have an impact on welfare payments and debt interest payments—we are paying £18 billion less in debt interest than was forecast—which is of course why we have not seen the big deterioration in the public finances that he and others predicted.

Oral Answers to Questions

Stephen Timms Excerpts

Tuesday 4th November 2014 Commons Chamber

[Priti Patel]

I welcome the hon. Lady’s support for the package, which is substantial. The priority must be its implementation and delivery, and we look forward to working with all parties to make sure that it is a success.

[Stephen Timms (East Ham) (Lab)]

11. What recent forecast he has made of the change in the deficit between May 2010 and May 2015.

[The Economic Secretary to the Treasury (Andrea Leadsom)]

In 2010 the Government inherited the largest deficit since the second world war at 10.2% of GDP. We have made substantial progress in reducing the deficit since 2010. By the end of the last financial year 2013-14, the deficit had fallen from £149 billion to £95.6 billion, estimated at Budget 2014. As a share of GDP that is a fall of more than a third from its peak.

[Stephen Timms]

The Chancellor’s promise to eradicate the deficit in this Parliament has long since been abandoned, but with the deficit going up in the first half of this financial year, the scaled-back aim of halving the deficit by the end of this Parliament looks in serious trouble as well. The Chief Secretary has just attacked the unfunded tax cuts that the Chancellor announced. Does the Minister still think that the tax deficit will even be halved by the end of the current financial year?

[Andrea Leadsom]

The right hon. Gentleman is possibly being a little mischievous. As a veteran Chief Secretary to the Treasury from the previous Government, he should well understand that, according to the OBR’s comments and looking at its 2010 forecast errors over time, the biggest difference between 2013 and earlier was the lack of external shock. In 2011, high commodity prices ate into disposable incomes and the euro area crisis damaged credit and confidence. He should well understand why the deficit reduction was impacted by external shocks.

Oral Answers to Questions

Stephen Timms Excerpts

Tuesday 2nd September 2014 Commons Chamber

[Mr Osborne]

The answer is that it compares very well. There has been a much faster rate of job creation in the United Kingdom than in the rest of Europe, for example, which I suggest is because we have instilled confidence in our ability to pay our way in the world through our difficult but necessary deficit reduction plan. We have helped businesses to employ extra people through the employment allowance and other tax changes, and we have created a more entrepreneurial economy, so that people who were out of work when this Government came to office got a chance of being in work, with all the security and opportunity that brings.

[Stephen Timms (East Ham) (Lab)]

May I press the Chancellor on the deficit? The central objective of his plan when he launched it was to eradicate the deficit in this Parliament, but he now estimates that he will only halve it. Why has the plan fallen so far short of that central objective?

Oral Answers to Questions

Stephen Timms Excerpts

Thursday 3rd July 2014 Commons Chamber

[Stephen Timms (East Ham) (Lab)]

The analyst, Redburn, has pointed out that claims that the UK is doing well on superfast broadband are

“only true using a rather unambitious definition of superfast”.

A number of European countries now have over 20% fibre- to-the-home penetration, with symmetric 100 megabits- per-second services. The Under-Secretary of State, the hon. Member for Wantage (Mr Vaizey), told me in a written answer on 23 June that he does not know how much of that we have in the UK, but the industry estimates penetration to be about 0.5%. Surely we need to be doing much better.

[Sajid Javid]

The right hon. Gentleman will be pleased to know that superfast coverage in the UK is the highest among the EU5 countries; it is higher than Germany, higher than Spain, five times higher than Italy and three times higher than France.